Lifestyle Protection by the Post Office

dunstonh

trixymalixy wrote: »

So who do we trust then?

Certainly not financial advisers in my experience.

IFAs have just 4% of complaints at the FOS (2% if you look at the latest trend) despite handling the majority of transactions. FAs and agents have the majority of complaints.

How many IFAs have you seen over the years? How many FAs, agents or mortgage advisers? What is your experience with each type to give you that view?

No profession is perfect but the stats for IFAs dont back up your opinion. Maybe for sales reps and agents and certain mortgage adviser types.

trixymalixy

My first experience with an IFA was when I was a lot younger and more financially naive than I am now! What he sold us wasn't what we asked for or what we needed and certainly wasn't the best value for us given that our main requirement was affordability. His main concern was the level of his commission.

I had a bizarre experience with a mortage adviser from my solicitor's office when we bought our current house who told us he wouldn't be able to get us that level of mortgage despite us having an agreement in principal with another lender with a multiplier of less than 3 time joint salary. Given that this was back when people were getting offered ridiculous multipliers we were a bit taken aback. He must have miscalculated and phoned us the next day to say we would be able to get us a mortgage and we just laughed at him. Didn't really inspire confidence.

In my previous job I dealt a lot with IFAs who almost without exception came across as rude and agressive and caring only about their commission. I was also shocked at some of their queries which showed little understanding of the products they were selling to their clients.

Friends of ours had a really bad experience with one IFA who when they found a better deal elsewhere became very nasty and aggressive.

I am sure there are some good ones out there.

dunstonh

What picture you paint is very different to what I experience. Most people I see have never seen an IFA before. Most have seen FAs, insurance agents and mortgage advisers over the years but you dont get many that have seen an IFA. Even then, they are not usually that critical of the agents etc.

I guess you have this knack of attracting the negative.

pearsond

Getting back to the PO Lifestyle protection...

I am one of those who took out the policy early March 2009 because it was the only one which offered £2500 protection - there were no other alternatives for this sum.

PO sent me a letter, as with others with this policy, advising me they are exercising their right to unilaterally change the terms and conditions with the effect that, amongst other things, the:

(a) benefit would be reduced to £1500;
(b) cost per £100 would increase; and
(c) deferment period on making a claim would now be 60 days, now with no "back payment" after the period ends.

The reason given was that the "economic climate had changed". I read this to mean the existing terms had become a "bad bargain" for AXA (the underwriters).

My view is that the clause allowing the PO to unilaterally change the terms and conditions is unfair, contrary to the UTCCR 1999 (unfortunately UCTA 1977 does not apply to insurance contracts). The UTCCR can be found here: opsi.
gov
.uk/
si/si1999/
19992083.htm.

If the clause is unfair under UTCCR, then it is void. If it is void, the PO accordingly cannot rely on it in order to change the terms and conditions of the policy.

If you go to Schedule 2 of the UTCCR, this gives a non-exhaustive list of such terms which are, on the face of it, deemed unfair. Look at paragraphs 1(j), (k) and (l).

These are terms:

"(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;

"(k) enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided;

"(l) providing for the price of goods to be determined at the time of delivery or allowing a seller of goods or supplier of services to increase their price without in both cases giving the consumer the corresponding right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded;"

The clause in Lifestyle policy seems to me to fall into one or more of the above categories.

Given that the contract does not give specific circumstances when the insurer may change the terms, and is changing them simply because the current terms are impacting the insurer's profits, I think there is a strong case the term is unfair and therefore void.

Moreover, the OFT guidance of the UTCCR (which can be found here: oft.
gov.
.uk
/shared_oft/
reports/unfair_contract_terms/oft311.pdf), analysing in detail the above legislation and would appear to agree with the analysis above.

I intend to take this to a small claims court if necessary, I think the financial ombudsman tends to show bias in favour of financial firms in these types of things, and is not as aware as it should be of (non-FSA) consumer law. I think my case is strong. One thing worth remembering, is I believe that it is the financial institution which has the burden of proving that the term is fair, not you, the consumer, to prove it is unfair.

One argument raised by the PO is that the policy is a "monthly renewal contract". By this argument, the PO is trying to claim that the amended terms are actually terms of a "new" contract, therefore trying to bypass the ambit of UTCCR.

This "renewable monthly contract" concept cannot be true, because (a) if you were to take out the policy for one month only, you would have no benefit, as the qualification period is a minimum of 60 days (now 120 days); and (b) if it were a true renewable monthly contract, the qualification period would reset after each month.

The contract is simply an open ended one, terminable by either party accoridng to the terms of the contract.

dunstonh

it was the only one which offered £2500 protection - there were no other alternatives for this sum.

There were and still are others. However, those ones are typically not available for the DIY market. The PO was different in that respect.

I intend to take this to a small claims court if necessary

Good luck with that. What level of financial loss are you going to claim for?

One argument raised by the PO is that the policy is a "monthly renewal contract". By this argument, the PO is trying to claim that the amended terms are actually terms of a "new" contract, therefore trying to bypass the ambit of UTCCR.

They are correct in that the contracts are pay as you go. The fact that there is a qualifying period doesnt change that.

I suggest you seek legal advice before you waste any money on a pointless excercise.

pearsond

Dustonh

I disagree, your comments aren't helpful or constructive to those seeking redress.

Please only post comments which are helpful to people.

To date they seem to be smug and useless.

Damages are assessed on the cost of putting the injured party in the position they should be in, had the defaulting party performed their obligations under the contract. On this measure, and in simple terms, I would claim the cost of taking out a further insurance policy for the £1000 benefit I have lost, for example. There is also the option to sue for specific performance, which is a court order forcing the insurer to perform the contract.

I don't follow your reasoning on the renewable contract point. It is not an argument for the insurer to claim "it is because it is" or "it is renewable because it says so" as you seem to be suggesting. It is the substance, not the form, which counts.

The concept of a qualifying period does have the capacity to change whether the contract is, in law, a renewable monthly contract or not. Think about it for a few minutes. The "start date" would repeat each month, and accordingly you would never end your qualification period if this were true. Such concepts cut across months, which cannot be interpreted correctly in a monthly, rather than an open ended policy/contract.

Other than paying a premium on a monthly basis, there are no other concepts within the contract which smack of a monthly renewable contract.

If you have any suggestions which might help the consumer or strengthen his or her case, please feel free to post them.

~Brock~

At the point the cover was reduced, your options would have included cancelling the policy and taking one out with another company.

IMO you are throwing your money away pursuing this. It appears that you will only tolerate replies that agree with you, and consider anything else to be unhelpful, but the advice that dunstonh and myself are offering is - don't waste your money. I would consider such advice to be helpful.

dunstonh

I disagree, your comments aren't helpful or constructive to those seeking redress.

So what? You disagree and have an opinion. My opinion is that you dont have a hope in hell.

To date they seem to be smug and useless.

wow, you have read over 30,000 posts over 5 years. However, had you actually read them you would see that there have been plenty of times I have encouraged complaints to be made or action to be taken.

If you have any suggestions which might help the consumer or strengthen his or her case, please feel free to post them.

Give up now as you dont have a hope.

Credit-Crunched

If you actually read dunstonh posts they are informed and with no bias. I can't see where you argument lies in this case tbh. It is flawed from the start, if you wanted set over you should have opted for a more expensive IPI policy that can no be ammended by the insurer if market circumstances change. You opted for a low cost low benefit policy, now you are paying the price (not literally!)

RobertoMoir

pearsond wrote: »

Dustonh

I disagree, your comments aren't helpful or constructive to those seeking redress.

Please only post comments which are helpful to people.

To date they seem to be smug and useless.

Someone else who feels that anything that isn't what they wanted to hear anyway is rude and unhelpful. Sometimes the truth is like that.

Those posts of Dunstonh's that I have seen have always been helpful to the point that they deal with things as they are and not how the people he's replying to want them to be.

You can always find someone on here to agree with you and/or cheer you on, no matter what you say, and you can always find someone on here ready to call you an idiot no matter what you say. I don't personally think that people who agree with you no matter what are actually all that helpful - sometimes you just need someone who tells it how it is.

From what I've seen, Dunstonh does that, simply calls it how they see it, no more and no less.